from the sneaky-sneaky dept

It's tax time again, when we all turn just a bit more Republican for a month or so, curse out the inept government that asks us to pay for all that they do, and emote a general grumbling attitude throughout the days. Fun, right? Part of what makes this time of year such a royal pain in the ass is that many of us pay to pay our taxes, using any number of accounting and tax prep services just to keep Uncle Sam off our backs. Last year, we wrote about how Intuit, the company behind TurboTax, was actively waging a campaign against the government free-filing program, in which the IRS offers to fill out much of the paperwork and allow citizens to e-file their taxes with minimal input. The program is entirely voluntary, but that didn't stop Intuit from raging against the machine, suggesting that the IRS would overcharge the poor and that the program would, like, really hurt their business (honesty!).

It turns out that trying to stifle people's ability to simplify their own lives and file their taxes for free wasn't all that great for the old public relations department, however, so Intuit has instead decided to go the sneaky route and get a bunch of unwitting mouthpieces to do it for them.

Over the last year, a rabbi, a state NAACP official, a small town mayor and other community leaders wrote op-eds and letters to Congress with remarkably similar language on a remarkably obscure topic. Each railed against a long-standing proposal that would give taxpayers the option to use pre-filled tax returns. They warned that the program would be a conflict of interest for the IRS and would especially hurt low-income people, who wouldn't have the resources to fight inaccurate returns. Rabbi Elliot Dorff wrote in a Jewish Journal op-ed that he "shudder[s] at the impact this program will have on the most vulnerable people in American society."

So you're wondering where the problem in all of this is? Well, it turns out these folks didn't just independently decide to write the same op-eds. It would appear that they were approached by groups affiliated with Intuit and asked to write them. The folks targeted weren't informed of the connection, either.

Rabbi Dorff says he was approached by a former student, Emily Pflaster, who sent him details and asked him to write an op-ed alerting the Jewish community to the threat. What Pflaster did not tell him is that she works for a PR and lobbying firm with connections to Intuit, the maker of best-selling tax software TurboTax.

"I wish she would have told me that," Dorff told ProPublica.

You think? What once appeared to be some kind of grassroots campaign by the concerned public towards what might be a real issue suddenly has devolved into a public relations blitz undertaken through dishonest means by corporate interests. In other words, it's the same message we got last year, and from the same source, but that source is hiding behind unwitting accomplices. The underhanded deeds weren't over, however.

The website of Pflaster's firm, JCI Worldwide, had listed Intuit among its clients, but removed it after ProPublica contacted them. Pflaster said Intuit had been listed by mistake....

That's quite an error to make and quite a coincidental time for that error to be "corrected." And, while Intuit's only comment on the matter was some general mumblings about how they use multiple avenues to improve "tax empowerment" of the public, it's a special kind of shady that refers to demonizing an entirely optional and free government service as empowerment of the public. Meanwhile, of course, Intuit has lobbied heavily on bills related to free-filing.

In the end, there may indeed be flaws in the government's free-filing program and process. Actually, it'd be a bit of a shock if there weren't flaws. But it's voluntary, and the solution to those flaws is most certainly not subterfuge and dishonest attempts to coerce a public through their religious leaders.

from the getting-intuit dept

Three years back, Mike wrote a piece about how Intuit, maker of TurboTax software, was actively lobbying against a system that would allow for a simple, quick way of filing income taxes (a way that might possibly mean fewer people need to buy TurboTax). Basically, the government could give you pre-filled out forms with all the info it received from your employer and you could just review it, click okay, and be done with your taxes. Intuit's explanation for fighting this ranged from lying by saying taxpayers already had access to that functionality (they don't) and misleading when they said it was a conflict of interest for the government to be the tax preparer and collector (the government wouldn't be doing any actual preparation). Now, as we approach the income tax deadline in the United States, Intuit has changed its tune. That doesn't mean they've stopped lobbying against this system, which has been backed by presidents from Reagan to Obama. Rather, their excuses have simply changed to be at once even more misleading and simultaneously more honest.

Let's take the first excuse, for instance.

Intuit argues it might cost some taxpayers more money.

Well, thank science that we have disinterested parties like Intuit looking out for our tax-paying well-being. The system would cost more money? Obviously the government is trying to force more taxes out of hard-working 'Mericans! That would be the conclusion you could reach if the proposed return-free filing program wasn't entirely optional. Instead, Intuit comes off as merely wishing to keep choices away from Americans. As for their second reason:

Such changes would hurt its business.

Boom, honesty. Requesting tax-paying options not be given to American citizens because it would hurt a company's bottom line is an interesting argument to make. By interesting, of course, I mean laughably silly. What's not silly is that for the past five years, the $11.5 million Intuit has paid in lobbying efforts has resulted in the selling out of the American taxpayer. Reports suggest that enabling a return-free system would save taxpayers up to $2 billion (with a "b") and over two hundred million hours in preparation time.

But, hey, that apparently won't stop the company and a couple of key allies from fanning the flames of anti-government conservatives to make sure it rakes in billions (also with a "b"). Intuit has decried the simple filing solution to be "big government", despite the conservative argument generally looking to make the tax system more simple. Backing them, unbelievably, is tax activist Grover Norquist.

from the aren't-we-done-with-this-yet? dept

For the 9th year in a row, the Business Software Alliance (BSA), an organization that mainly represents Microsoft's interest, has put out its ridiculous "Global Software Piracy Study", which argues that tons and tons of software is being pirated, and if only people paid for it, there would be $63.4 billion more going to software companies. We've been criticizing the ridiculously laughable methodology of the report since it began, and even have seen the company that does the research, IDC, admit that the BSA exaggerates what the report actually says. We've done multiple detailed analyses of how the BSA's stats are misleading (or just flat out bogus). And yet, because there are magical numbers involved, the press just loves to parrot the claims without any skepticism.

This year's report is no different. It's more of the same ridiculousness, with a clueless press reporting (totally inaccurately) that the study says that software piracy "costs" the economy $63.4 billion. That's simply not true. What the report did find was not actually surprising or even very interesting. It's that people in developing countries tend to infringe more often. You probably knew that already, but if you wanted evidence for that, you shouldn't look to the BSA and its bogus stats, but a thorough, comprehensive and independent review of the market, such as the one done by Joe Karaganis and SSRC last year. That report found the reason that there was increased piracy in developing markets was because clueless companies don't realize that people aren't going to pay a month's salary for a single digital good.

Of course, rather than recognize it's their own business model failings at issue, the BSA is once again using this report to call for "tougher penalties" for infringement. This despite the fact that no study has ever shown that such penalties actually drive more people to buy.

Thankfully, at least some people are calling the BSA out on its bogus report, such as by noting that it's political propaganda designed to get legislation like SOPA and PIPA passed. The reality, of course, is that it shows how out of touch the BSA is with the innovation economy today, instead working to lock up and protect the interests of its major funders: Microsoft, Symantec and Intuit. Those companies are threatened by upstarts with better business models, and the best they can do is to support legislation that will lock down the internet, causing more harm than good for true innovation.

The "Bogus Stats Again" report from the BSA isn't about dealing with piracy. It's a way of white washing an agenda of protectionism for some large software companies who don't want to compete or to adapt.

from the urls-you-dig-up dept

Most new businesses fail within a few short years. It's just a fact. Yet optimism abounds, and entrepreneurs are always ready to start over with a new venture. Circumstances are usually just a fraction of the game (20% if you really need a made-up statistic), the rest of the outcome is based on how people react to various changes in the economy. Here are some interesting links for anyone with a startup idea.

from the corporate-culture dept

Earlier this year, we wrote about how much effort Intuit has put towards blocking proposals to have the federal government send you pre-filled out tax forms. After all, the IRS already has your information, so why not just send you a form with all of your details filled in, let you check it over for any mistakes, errors or omissions, sign it and send it back? It would save a whole lot of hassle, and certainly would avoid problems caused by simple mistakes. But, of course, if the government made it easy to pay your taxes, why then, Intuit wouldn't be able to sell as many copies of TurboTax. So it's been fighting it all along.

Of course, some states have already implemented similar systems for state taxes, and Intuit then goes on the lobbying offensive to try to repeal those laws. Reader Xan points us to an LA Times story about the lengths to which Intuit is going to try to kill off a highly successful set of programs in California that have made it much easier for many, many, many residents, while at the same time saving the state millions of dollars. It's a clear win-win.

Well, except for Intuit.

Intuit is lobbying hard for California to ditch this tremendously successful program that helps both tax payers and the state, and replace it with a different program that... helps Intuit. It would offer a much more limited offering to many fewer people, mostly designed as an upsell to get people to pay for TurboTax. And, while Intuit hasn't been successful yet, it has been spending plenty of money supporting California state politicians on both sides of the aisle to try to find support for its efforts.

from the sue,-sue,-sue,-sue dept

As we keep waiting for a Supreme Court ruling in the Bilski case (any day now...), Glyn Moody points us to the news of a lawsuit that has been filed against 26 different software companies for violating an incredibly broad patent (5,832,511) on "Workgroup network manager for controlling the operation of workstations within the computer network" (say that 10 times fast). The list of companies sued is a who's who in software:

I'm sure none of those companies could have possibly come up with a system for controlling the operation of workstations within a computer network without this patent. At some point, isn't the fact that such a vast number of companies appear to have come up with the same basic thing independently a perfect prima facie case of obviousness?

from the isn't-that-special dept

A fascinating article points out that the government could make the process of filing your tax returns significantly easier by simply sending you pre-filled out forms of what they know (basically what's been sent in from your employer(s)) so that you could just take the pre-filled form, check it over, make any additions or changes as necessary and submit it. Apparently, many places that have done this have had great success with it. But it's not happening in the US in large part due to heavy lobbying from Intuit, who fears (perhaps correctly) that this would put a big dent into its tax preparation software business. Of course, that's not how Intuit puts it. The company first claims that this functionality is "already available" (it's not) and that it is a "conflict of interest for government to be both tax collector and tax preparer." However, that is also inaccurate. No one is asking the government to be the tax preparer, but just to share the information it already has so that individuals aren't forced to rebuild the info themselves. As one person quoted in the article notes, it's "as if Visa sent customers a blank piece of paper, requiring that they assemble their receipts, list their purchases -- and pay a fine if they forget one." So, everyone, thank Intuit for making tax season that much more frustrating.

from the gotta-get-it-done-before-bilski dept

Brian points us to the news of yet another questionable patent lawsuit filed by yet another shell company, yet again in Eastern Texas against a ton of software companies. The patent in question (5,222,134) is for a "secure system for activating personal computer software at remote locations," and was originally filed back in 1991 and granted in 1993 -- meaning that the patent is actually nearing end of life. Odd, then, that it was suddenly noticed that all these companies were infringing. The lawsuit is filed by a shell company called BetaNet, and no one seems willing to speak. The lawyers representing BetaNet won't say who is behind the company, or how they even got the patent. This is typical. Many of these types of lawsuits are filed by shell companies to hide who is actually behind them. As for the defendants, here's the list:

Obviously, none of those companies could have come up with ways to remotely activate software without this patent (yes, that's sarcasm). As the Register notes in the link above, even some of the software products listed as violating this patent don't seem to involve activation at all, raising serious questions about how they could possibly violate this patent. This sounds like yet another case of someone having read the book Rembrandt's in the Attic and deciding to go trolling for companies to sue with a meaningless patent.

from the money-wasted dept

It's no secret that I have tremendous problems with Nathan Myhrvold's Intellectual Ventures, which many have described as the world's biggest patent "trolling" operation. The company has raised a ton of money and uses it to buy up thousands of patents. While it hasn't sued anyone, Myhrvold has made clear that's always an option. The company has remained incredibly secret, but it has somehow convinced some big companies to pay hundreds of millions to IV. Due to the secrecy, the details aren't clear -- and some of the deals apparently are a mix of "licensing" and an equity investment. But, still, the numbers are stunning. The latest, as pointed out by Stephen Kinsella is that Intuit has apparently paid $120 million to IV. For what? The right not to get sued. Think about that for a second. This is a pure dead weight net loss to society. It's $120 million that Intuit could have put towards further innovating, or to pay off investors via a dividend. Instead, it goes towards nothing productive, in terms of actually creating new products. It will now likely be used to buy up more patents so that IV can get similar black hole money grabs from other companies, as well. It's like a black hole where real innovation goes to die.

from the welcome-to-competition dept

There's a disturbing trend in various discussions we have here (especially on patent discussions) where people seem to insist that big companies automatically win in competitive environments. Yet, especially in the tech space, we've seen that it's often quite difficult for big companies to do that. Smaller companies are often more innovative and effective at taking on big companies. The idea that some big company can just copy someone else's product and automatically take over the market is clearly wrong. Does it happen sometimes? Sure. But as has been noted by many folks, if your product is truly innovative, you'll often have to beg people for attention, rather than worrying about anyone copying it.

A great example of this is the failure of Microsoft Money. The company has now announced that it's going to discontinue the product despite years of effort and millions of dollars spent to try to defeat Intuit's Quicken product. In fact, the saga of the battle between Intuit and Microsoft highlights (yet again) that it wasn't so much the invention part that allowed Intuit to win the battle, but the innovative way in which Intuit kept and grew marketshare. In an interview with News.com, the guy who ran Microsoft Money for a few years, noted that Intuit beat Money because they did a better job with the marketing.

Meanwhile, of course, it's worth noting that Intuit itself is now facing upstart challenges from web-focused startups like Mint and Wesabe, and some believe the company is discovering in its own way how smaller, more nimble startups can succeed against larger entrenched interests. Innovation is an interesting beast. The idea that big companies can always defeat smaller ones has been disproved many times -- but here's yet another example.